China factory output rises in May but officials guarded

However, property investment and construction showed a much sharper deceleration after a slew of government cooling measures in recent months. "The pace of decline in production will ease this year due to higher crude prices", Gao Jian, a crude oil analyst with China Sublime Information Group, told Reuters.

Some 5.99 million new jobs were created in China's urban regions from January to May, up 220,000 from the same period previous year, said Liu Aihua, spokesperson of the National Bureau of Statistics, at a press conference.

Last month, China's refinery runs jumped by 5.4 percent on the year to 10.98 million bpd, and although they were down from a record level from March this year, throughput marked the highest year-over-year growth in May 2017 since May 2015.

But, for now, manufacturing activity still appeared to be well supported by a year-long construction boom fuelled by a government infrastructure spree and a heated property market.

During January to May, fixed asset investment increased 8.6 percent from the same period of the previous year, which was slower than the 8.8 percent growth economists had forecast and the 8.9 percent rise logged during the January to April period.

China's service sector continued to expand in May, lending steam to the country's stable economic growth and employment, official data showed on Wednesday.

Private investment accounts for about 60 percent of overall investment in China.

But some China watchers are more anxious about the risks of sharp slowdown next year.

That was a moderation on the 8.9% year-on-year expansion reported in the first four months of the year and missed forecasts for a smaller slowdown of 8.8%.

Early warning indicators of a financial crisis were already flashing red, economists at Nomura said in a note this week, echoing the warnings of others such as the Bank for International Settlements (BIS).